Dec 6, 2012

ASEAN may expect a rise in foreign direct investments over the next two
years as the Asia-Pacific becomes the preferred business destination due to the
positive outlook on the economies in the region, according to Multilateral
Investment Guarantee Agency (Miga).

A unit of the World Bank Group
that provides guarantees to investments in developing countries, Miga said the
more encouraging growth performance of developing countries vis-à-vis advanced
economies would allow the former to register double-digit growth in FDIs.

It projected that total FDIs to
developing countries would reach $697 billion next year—up by 17 percent from
the estimated $594 billion this year.

The estimated $594 billion worth
of FDIs to developing countries in 2012 marks a decline of about 7 percent from
last year’s nearly $639 billion.

The drop in this year’s FDIs has
been blamed on investor’s risk aversion brought on by the crisis in the
eurozone and the sluggish growth of the United States.

Global FDIs are estimated to have
dropped by 10.5 percent to $1.7 trillion by end-2012 from last year’s $1.9
trillion.

Thailand

A conglomerate controlled by
Thailand’s richest man has bought a minority stake in China’s Ping An Insurance
for $9.38 billion from global bank HSBC, a bold move that ranks as Asia’s
second-largest deal this year.

Dhanin Chearavanont’s Charoen
Pokphand Group (CP Group) bought the 15.6 percent stake in a deal that marks a
departure from its core food businesses, such as poultry and animal feed, but
appears to strengthen the 73-year-old’s ties to Beijing.

HSBC , which announced the
transaction on Wednesday under its recovery plan to sell non-core assets, said
CP Group’s purchase was being partly financed by state-run China Development
Bank.

Dhanin – worth $9 billion
according to Forbes magazine – already has major business interests in China
ranging from agriculture to retail to auto manufacturing.

Singapore

UEM Land Holdings Bhd says more
investments from Singapore are expected to flow into Iskandar Malaysia in the
coming years as the economic growth corridor progresses.

He said in the early days of the
corridor’s inception, many Singaporeans were adopting the “wait and see”
attitude as they wanted to see whether the economic growth corridor would take
off as planned.

“But six years down the road,
their perception has changed and now they are looking at investing in Iskandar
Malaysia,” Wan Abdullah told a press conference after signing a joint-venture
agreement with Singapore’s FASTrack Autosports Private Ltd to develop
Motorsports City in Gerbang Nusajaya.

The 70:30 joint-venture between
FASTrack Autosports and UEM Land, valued at over RM3.5bil, will see both
parties establishing the Motorsports City masterplan as well as the development
and marketing strategies of the project.

Wan Abdullah said work on the
project would take place within six months and expected to be completed in 2015
or 2016.

“The first phase of Iskandar
Malaysia is more on laying the foundation and now is to create more job
opportunities and economic spills-over,” he said.

The 109.26ha Motorsports City
located at Gerbang Nusajaya, just metres away from the Second Link crossing, is
an integrated mixed commercial development with a proposed 4S (sales, services,
systems and spare) facilities.

It will be equipped with a
F1-compliant test track, car showrooms, service centres, system enhancements
and upgrades, Continental and Asian spare parts hub, bonded warehouses/garages,
retail and al fresco spaces with food and beverage outlets and an entertainment
hub.

At the heart of development is
the 4.5km long test track dubbed the “Nurburgring of Iskandar Malaysia” to be
designed by an internationally-acclaimed F1 track designer.

There is also a proposed
international race-certified 1.5km long go-kart track, Asian-based motor sport
R&D facilities, office spaces and the project will create 5,000 new job
opportunities.

The person behind the
multi-billion project is Singapore billionaire Peter Lim, the major shareholder
of FASTrack Autosports.

“This project (Motorsports City)
is something that I like to do. The cost of doing business in Singapore is
higher and Iskandar Malaysia seems attractive to me,” said Lim.

He said he was looking at
developing two more integrated mixed development projects within Iskandar
Malaysia.

The time was “right” for to
invest in Iskandar Malaysia due to the good growth prospects and opportunities
offered by the economic growth corridor, Lim said, adding that one of the
property projects was an intergrated mixed development in the Stulang Laut area
just few metres away from the Bangunan Sultan Iskandar Customs, Immigration and
Quarantine Complex near here.

Separately, UEM Land also signed
a Memorandum of Understanding with Chinamall Holdings Pte Ltd to develop China
Mall, a trade and exhibition centre in Gerbang Nusajaya.

The 1.4 million sq ft gross floor
area on a 12.94ha site worth RM562mil will house 3,000 merchants from China
offering products such as textiles, gifts, souvenirs, furniture, electrical and
household appliances, jewellery and toys.

The pay-TV operator said on
Wednesday there was an unrealised forex gain of RM30.6mil versus an unrealised
forex loss of RM47.4mil a year ago, which was offset by a decline in earnings
before interest, tax, depreciation and amortisation (EBITDA) of RM14.3mil and
higher depreciation of RM45.6mil.

It said revenue rose 8.3% to
RM1.078bil from RM995.31mil a year ago. Earnings per share were 5.20 sen. It
declared an interim dividend of 1.5 sen per share.

Astro said the higher revenue was
mainly due to the increase in subscription revenue of RM74.5mil.

“The increase in subscription
revenue is attributed to both an increase in ARPU for Pay-TV residential
subscribers of RM4.90 (from RM87.40 to RM92.30) and an increase in number of
Pay-TV residential subscribers from 3,013,500 to 3,213,100,” it said.

However, it said group earnings
before interest, tax, depreciation and amorisation fell by RM14.3ilm from a
year ago mainly due to higher installation, marketing and distribution costs.
These were in relation to customer acquisition as well as higher B.yond boxes
swap out, higher content costs, staff related costs and impairment of
receivables.

As for its cashflow, it said cash
and cash equivalents increased to RM927.4mil from a year ago mainly from
proceeds from the shares issuance, net of issuance costs of RM1.387bil.
However, this was offset by lower operating cash flows of RM69mil and payment
of dividend of RM366.0mil.

For the nine-month period ended
Oct 30, 2012, the earnings fell 29% to RM334.84mil from RM472.04mil.

“The decrease in net profit is
mainly due to higher depreciation of RM113.2mil, decrease in EBITDA of
RM46.6mil, and increase in finance costs of RM70.1mil, which is partly offset
by increase in finance income of RM33.6mil and lower taxation of RM57.7mil,” it
said.

Its revenue rose 11.5% to RM3.133bil
from RM2.811bil mainly due to the increase in subscription and advertising
revenue of RM269.4mil and RM52.2mil respectively.

On the outlook, it said Astro TV
expected subscriber net additions, ARPU and adex to continue to contribute to
its revenue growth.

“The conversion of residential
subscribers to Astro B.yond set-top boxes is progressing according to plan and
is expected to complete by the next financial year. This will continue to drive
higher take-up of value added services such as high definition, recording
services and Video-On-Demand, which are the primary drivers of ARPU growth.

“However, this is expected to
impact the group EBITDA and net profit for the remainder of this financial
year. The group continues to have good visibility in respect of content costs
which are in line with its expectation,” it said.

Indonesia

State-controlled construction
company Waskita Karya has received a surge of interest from investors keen to
get a stake in the company, with demand for shares more than double the amount
set to be sold at next week’s offering, a government official said on Tuesday.

Pandu Djajanto, an official at
the State Enterprises Ministry, said that the oversubscription was based on a
recapitulation from joint lead underwriters Mandiri Sekuritas, Bahana
Securities and Danarekasa. This indicates that both foreign and local investors
are eager to get their hands on Waskita shares, said Pandu, who on Tuesday
signed a pricing arrangement on the shares being sold in the initial public offering.

Waskita plans to sell 3 billion
shares, or 35 percent of its enlarged total, in an IPO next week. The company
is estimated to raise up to Rp 1.2 trillion ($125 million) from the IPO. The
company will offer the shares to investors from Dec. 12 to Dec. 14 and plans to
list them on the Indonesia Stock Exchange (IDX) on Dec. 19.

Waskita may price the stake sale
between Rp 333 and Rp 400 a share, media reports said last month.

State Enterprises Minister Dahlan
Iskan on separate occasions has said the government expects the IPO to raise as
much capital as possible. Dahlan, however, refused to disclose the intended
Waskita offer price.

The minister said the government
plans to stop using foreign-owned securities companies to handle IPOs for
government controlled companies.

“We only use the three
state-owned securities firms. We must have faith in the capability of our own
firms,” he said.

Waskita has talked to potential
investors in Indonesia, Singapore and Hong Kong.

Waskita first announced the plan
to conduct an IPO in 2010, but delayed it for several reasons, including
unfavorable financial conditions.

The government has injected Rp
475 billion into the company to cover misstatement in the company’s 2004 to
2007 financial reports. Since then, the company has been put under the
management of Perusahaan Pengelola Aset, a state agency tasked with
restructuring mismanaged state enterprises like Waskita. Waskita’s net income
was Rp 37.1 billion during the first six months of 2012, while revenue stood at
Rp 2.7 trillion. Its assets were valued at Rp 5.6 trillion at the end of June.

Waskita would be one of several
state-controlled companies to tap funds in the local equity market and be
listed on the Indonesia Stock Exchange.

Philippines

PLDT revenue will rise as
California-based Apple Inc. announced that the new Apple iPhone 5 will hit
Philippine shores on Dec. 14, just in time for Christmas.

The world’s most valuable company
in a post on its website said the Philippines was included in a list of more
than 50 countries where the new smartphone would be launched this December.

The first on the list would be
South Korea, where the new iPhone will be available starting Dec. 7.

The following week, the device
will become available in countries such as the Philippines, Brazil and China.

Spokespersons from Smart
Communications and Globe Telecom, the country’s major networks, declined to
release details on availability as of press time.

The new iPhone, the sixth
released by Apple despite the name, is thinner and lighter than previous
models. It also features a four-inch screen, a departure from the 3.5-inch
screens that all previous models had.

Tokyo ended 0.39 percent,
or 36.38 points, up at 9,468.84, Sydney was 0.37 percent, or 16.8 points,
higher at 4,520.4 and Seoul climbed 0.61 percent, or 11.86 points, to 1,947.05.

Hong Kong added 2.16
percent, or 470.94 points, to end at 22,270.91, while Shanghai surged 2.87
percent, or 56.77 points, to 2,031.91 after this week hitting its lowest level
since January 2009. Dealers were also lifted by speculation that the Chinese
government will soon unveil new plans for the economy.

Singapore’s Straits
Times Index closed up 0.45 percent, or 13.80 points, at 3,075.92.

Olam International sank 5.31
percent to Sg$1.52 while City Developments added 1.80 percent to Sg$11.87.

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